UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 24, 1999
(November 12, 1999)
-------------------
COVER-ALL TECHNOLOGIES INC.
----------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
Delaware 0-13124 13-2698053
-------- ------- ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
18-01 Pollitt Drive, Fair Lawn, New Jersey 07410
------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (201) 794-4800
--------------
N/A
-----------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
In a press release dated November 15, 1999, Cover-All Technologies Inc.
(the "Company") announced its earnings information and results of operations for
the Company's 1999 third quarter. The Company also announced that Mark Johnston
succeeded Brian Magowan as the Company's Chairman and Chief Executive Officer as
of November 12, 1999. A copy of the release is attached.
In addition, the Company was informed by letter that, based upon the
results of its operations for the third quarter of 1999 Summit Bank has
terminated its revolving credit arrangement with the Company for up to
$2,000,000. At no time since the inception of this revolving credit arrangement
did the Company draw down on this facility with Summit Bank.
Item 7. Exhibits.
(c) Exhibits.
99.1 Press Release, dated November 15, 1999.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COVER-ALL TECHNOLOGIES INC.
Date: November 24, 1999 By: /s/ Mark Johnston
-------------------------------
Mark Johnston, Chairman and
Interim Chief Executive Officer
<PAGE>
"For Immediate Release"
For Information Contact:
Mark Johnston
Chairman of the Board and
Interim Chief Executive Officer
Cover-All Technologies Inc.
Reports Third Quarter
Operating Loss
Fair Lawn, NJ - November 15, 1999 - Cover-All Technologies Inc. (NASDAQ SmallCap
Market: COVR and PHLX - CVA) (the "Company") today announced results for the
quarter ended September 30, 1999.
Total revenue for the three month period ended September 30, 1999 was $2,134,000
compared to $3,811,000 in the same period in 1998. For the nine months ended
September 30, 1999 total revenue was $9,102,000 as compared to $10,314,000 in
the same period of 1998. Net income (loss) for the three month period ended
September 30, 1999 was $(1,326,000), or $(0.08) per share, compared to $728,000,
or $0.04 per share, in the same quarter of 1998. Net income (loss) for the nine
months ended September 30, 1999 was $(993,000), or $(0.06) per share, compared
to $1,630,000, or $0.10 per share, in the same quarter of 1998.
The Company attributes the decline in earnings to lower software licensing
revenues and expense overruns in connection with TAS2000 contracts. Two of the
TAS2000 contracts were successfully cut over to full production usage: however,
one TAS2000 contract has become the subject of non-binding mediation relative to
completion. The Company maintains that it has successfully performed its
required obligations and that significant payments are currently due from this
customer. Payments demanded and unpaid approximate $1.9 million. The Company
believes this matter may not be concluded until the next quarter, or later.
Sales and marketing expenses remained at 1998 levels.
Mark Johnston, a director and major shareholder of the Company, was appointed as
Chairman and interim Chief Executive Officer of the Company to succeed Brian
Magowan, effective November 12, 1999.
Mr. Johnston stated:
"We are disappointed that the management of the implementation cycle for the
TAS2000 contracts has been adversely reflected in the operating results of the
Company in the third quarter. However, the Company has achieved a major
milestone with the successful cut over to full production usage of the TAS2000
at two customer sites, one in the U.S.A. and one in the U.K. We thank these
customers for their commitment both to our Company and to the TAS2000 product.
We are also disappointed to have encountered a dispute with one TAS 2000
customer, however we believe our position will be sustained in mediation. We
will continue to encourage this customer to facilitate the successful cut over
of their legacy system to the TAS2000 total solution workers compensation line.
<PAGE>
I am pleased to report that the Classic division continues to return increased
profitability and an increasing revenue base. The Company's long term commitment
to maintaining and improving Classic has contributed to this positive scenario
in a mature product cycle. Of particular note is the first sale of iClassic,
which uses the Internet to provide access to the Classic system. This is an
especially useful feature for Managing General Agents requiring remote access to
the system. The Company is actively pursuing an Internet strategy that will
result in the launch of an ASP pricing initiative for Classic early in year
2000.
We recently began the search for a replacement CEO. We are confident the Company
can attract an individual who will capitalize on the bright prospects for
Cover-All in the new millennium."
Utilizing the latest client-server relational database technology, Cover-All
Technologies Inc. specializes in providing internet-enabled strategic policy and
premium software solutions to the property and casualty insurance industry. More
information may be obtained from the Company's web site at www.cover-all.com.
Statements in this press release, other than statements of historical
information are forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks which may cause the
Company's actual results in future periods to differ materially from expected
results. Those risks include, among others, risk associated with increased
competition, customer decisions, delays in productivity programs and new product
introductions, and other business factors beyond the Company's control. Those
and other risks are described in the Company's filings with the Securities and
Exchange Commission ("SEC") over the last 12 months, copies of which are
available from the SEC or may be obtained upon request from the Company.
The following is a summary of unaudited operating highlights for the three
and nine months ended September 30, 1999 and 1998.
Cover-All Technologies Inc. and Subsidiaries
Operating Highlights
Three months ended Nine months ended
September 30, September 30,
1 9 9 9 1 9 9 8 1 9 9 9 1 9 9 8
------- ------- ------- -------
Revenues:
Licenses $301,000 $1,527,000 $2,846,000 $4,952,000
Maintenance 1,133,000 956,000 3,236,000 2,761,000
Professional Services 700,000 1,328,000 3,020,000 2,601,000
------- ---------- --------- ---------
Total Revenues 2,134,000 3,811,000 9,102,000 10,314,000
--------- --------- --------- ----------
Costs and Expenses
Cost of Sales 2,273,000 1,637,000 7,106,000 4,845,000
Research and Development 291,000 239,000 778,000 783,000
Sales and Marketing 355,000 575,000 1,339,000 1,409,000
General and Administrative 492,000 568,000 942,000 1,432,000
Interest Expense, Net 49,000 64,000 130,000 215,000
------ ------ ------- -------
Total Costs and Expenses 3,460,000 3,083,000 10,295,000 8,684,000
--------- --------- ---------- ---------
Income from Operations (1,326,000) 728,000 (1,193,000)1,630,000
Income Tax (Expense)
Benefit --- --- 200,000 ---
--------- --------- ---------- ---------
Net Income (Loss) $(1,326,000) $ 728,000 $ (993,000)$1,630,000
=========== ======== ======== ==========
Basic Earnings Per
Share $ (0.08) $ 0.04 $ (0.06) $ 0.10
===== ==== ===== ====
Diluted Earnings Per
Share $ (0.08) $ 0.04 $ (0.06) 0.10
===== ==== ===== ====
